BREWING group Scottish & Newcastle has warned that its trading targets for this year looked `very challenging' after the wet July weather dampened customers thirst for beer and cider.

The group behind Foster's , Kronenbourg and John Smith's said the severe weather had led to `significant difficulties' in the British market.

The update came as the group posted pre-tax profits of £191m, up 5.5 per cent on last year, but below analysts' forecasts of around £206m.

The firm outperformed the British beer market during the six months to the end of June, as branded beer volumes fell by 3.9 per cent compared to an overall market decline of 5.2 per cent.

Cider performed particularly well, with market share gains from its mainstream Strongbow brand as well as in the `over ice' market following continued heavy investment in the period.

Strongbow revenues grew by 16.4 per cent as volumes rose 12.9 per cent, which helped secure a small slight rise in British revenues of 0.4 per cent to £855m.

Strong growth of the premium Bulmers Original, Strongbow Sirrus and Jacques brands helped the group achieve a 26.2 per cent share of the `over ice' sector. The performance contrasts with Dublin's C&C, which has warned on profits after disappointing sales for its Magners brand.

S&N said it expects to see the British beer market decline by between 1 per cent and 2 per cent along with slower growth in cider during the second half, as the impact of the smoking ban exacerbates weaker sales during July.

Chief executive Tony Froggatt said: "The continuation into July of exceptionally adverse weather will make the achievement of this year's trading targets very challenging."

Performance in France was also impacted by a brewery strike and tough trading conditions at its wholesale business.

Group profits were boosted by a strong international performance with operating profits up by 63.3 per cent in Russia as volumes grew 30 per cent.

In Manchester, S&N brews Fosters and Kronenbourg at its landmark Royal Brewery on Princess Parkway.